Foster Wheeler Enters into Definitive Agreement with AMEC

Foster Wheeler Enters into Definitive Agreement with AMEC
Business Wire
ZUG, Switzerland -- February 13, 2014
Foster Wheeler AG (Nasdaq:FWLT) (“Foster Wheeler” or the “Company”) today
announced that it has entered into a definitive agreement with AMEC plc
(“AMEC”) pursuant to which AMEC will make an offer to acquire all the issued
and to be issued share capital of the Company. Under the terms of the offer,
AMEC will offer to exchange for each outstanding share of Foster Wheeler
common stock transaction consideration consisting of 0.8998 shares of AMEC
stock and $16.00 in cash.
Separately, Foster Wheeler expects to pay a one-time dividend of $0.40 per
share prior to, and not conditional on, the closing of the offer. The Company
expects that there will be no Swiss withholding taxes on the dividend.
Today’s announcement follows the January 13, 2014 announcement of a
provisional agreement between the parties.
Based on AMEC's stock price of £10.92 per share (the close of trading on
February 12, 2014) and an exchange rate of £/$1.658, the proposed transaction
would value each Foster Wheeler share at approximately $32.69 and the fully
diluted share capital of Foster Wheeler at approximately $3.3 billion (taking
into account the proposed $0.40 dividend by the Company). This represents a
premium of approximately 13.8% to $28.73, the Company's closing stock price on
November 26, 2013, the trading day prior to initial public reports about a
potential business combination involving the Company and AMEC, and a premium
of approximately 20.4% to the 3-month volume weighted average price (measured
for the three-months ending on November 26, 2013) of approximately $27.15.
Kent Masters, President and Chief Executive Officer of Foster Wheeler, said,
“Both companies have strategies that are highly focused on growth, and our
combination will help deliver on Foster Wheeler’s key strategic objectives:
establishing material positions in upstream and minerals and metals, building
positions in growth geographies and extending our services offering.”
Specifically, the combination is expected to result in a company with:
*Complementary and more competitive market positions in offshore and
onshore upstream oil and gas, gas monetization, refining and chemicals,
minerals and metals, power and clean energy, environment & infrastructure
and pharmaceuticals
*An expanded, geographically diverse global presence, with offices and
projects in more than 50 countries
*A material increase in capacity, with a total headcount of more than
40,000 employees
*A strong financial profile, with annual pro forma revenues of
approximately $10 billion and backlog of approximately $10 billion
The Company believes that the meaningful equity component of the transaction
consideration will allow its shareholders to participate in the strategic and
commercial benefits of the combined company, including significant potential
synergies. Under the terms of the transaction, Foster Wheeler’s existing
shareholders will own approximately 23% of the combined company.
At the closing of the offer, two of the Company’s non-executive directors are
expected to join AMEC’s board as non-executive directors.
The offer is subject to customary closing conditions, including receipt of
applicable antitrust approvals, including in the EU and the US, approval of
the transaction by AMEC’s shareholders and approval by the Company’s
shareholders of the removal of certain restrictions in the Company’s charter
documents, a minimum of 80% of the Company’s shares having been tendered in
the offer (which condition can be waived down to 66-2/3% at the option of
AMEC) and approvals relating to the shares to be issued by AMEC by the US
Securities and Exchange Commission and the UK Listing Authority.
The transaction is expected to close in the second half of 2014.
Foster Wheeler is being advised by Goldman, Sachs & Co. and J.P. Morgan
Securities LLC, as financial advisors, and Freshfields Bruckhaus Deringer LLP
as legal advisors.
Foster Wheeler is a global engineering and construction company and power
equipment supplier delivering technically advanced, reliable facilities and
equipment. The Company employs approximately 13,000 talented professionals
with specialized expertise dedicated to serving its clients through one of its
two primary business groups. The Company’s Global Engineering and Construction
Group designs and constructs leading-edge processing facilities for the
upstream oil and gas, LNG and gas-to-liquids, refining, chemicals and
petrochemicals, power, minerals and metals, environmental, pharmaceuticals,
biotechnology and healthcare industries. The Company’s Global Power Group is a
world leader in combustion and steam generation technology that designs,
manufactures and erects steam generating and auxiliary equipment for power
stations and industrial facilities and also provides a wide range of
aftermarket services. The Company is based in Zug, Switzerland, and its
operational headquarters office is in Reading, United Kingdom. For more
information about Foster Wheeler, please visit our Web site at www.fwc.com.
Safe Harbor Statement
Foster Wheeler AG news releases may contain forward-looking statements that
are based on management’s assumptions, expectations and projections about the
Company and the various industries within which the Company operates. These
include statements regarding the Company’s expectations about revenues
(including as expressed by its backlog), its liquidity, the outcome of
litigation and legal proceedings and recoveries from customers for claims and
the costs of current and future asbestos claims and the amount and timing of
related insurance recoveries. Such forward-looking statements by their nature
involve a degree of risk and uncertainty. The Company cautions that a variety
of factors, including but not limited to the factors described in the
Company’s most recent Annual Report on Form 10-K for the quarter ended March
31, 2013 which was filed with the U.S. Securities and Exchange Commission, and
the following, could cause the Company’s business conditions and results to
differ materially from what is contained in forward-looking statements:
benefits, effects or results of the Company’s redomestication to Switzerland,
further deterioration in global economic conditions, changes in investment by
the oil and gas, oil refining, chemical/petrochemical and power generation
industries, changes in the financial condition of its customers, changes in
regulatory environments, changes in project design or schedules, contract
cancellations, the changes in estimates made by the Company of costs to
complete projects, changes in trade, monetary and fiscal policies worldwide,
compliance with laws and regulations relating to the Company’s global
operations, currency fluctuations, war, terrorist attacks and/or natural
disasters affecting facilities either owned by the Company or where equipment
or services are or may be provided by the Company, interruptions to shipping
lanes or other methods of transit, outcomes of pending and future litigation,
including litigation regarding the Company’s liability for damages and
insurance coverage for asbestos exposure, protection and validity of the
Company’s patents and other intellectual property rights, increasing global
competition, compliance with its debt covenants, recoverability of claims
against the Company’s customers and others by the Company and claims by third
parties against the Company, and changes in estimates used in its critical
accounting policies. Other factors and assumptions not identified above were
also involved in the formation of these forward-looking statements and the
failure of such other assumptions to be realized, as well as other factors,
may also cause actual results to differ materially from those projected. Most
of these factors are difficult to predict accurately and are generally beyond
the Company’s control. You should consider the areas of risk described above
in connection with any forward-looking statements that may be made by the
Company. The Company undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise. You are advised, however, to consult any additional
disclosures the Company makes in proxy statements, quarterly reports on Form
10-Q, annual reports on Form 10-K and current reports on Form 8-K filed or
furnished with to the Securities and Exchange Commission.
THE COMPANY'S SHAREHOLDERS ARE URGED TO READ ANY DOCUMENTS RELATING THERETO
REGARDING THE TRANSACTION WHEN THEY BECOME AVAILABLE (INCLUDING THE EXHIBITS
THERETO) AS THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE OFFER.
The offer has not commenced. At the time the offer is commenced, AMEC will
file a registration statement on Form F-4, which will include a prospectus and
joint proxy statement of AMEC and Foster Wheeler, and a Tender Offer statement
on Schedule TO (the “Schedule TO”) and the Company intends to file a
Recommendation Statement on Schedule 14D-9 with respect to the offer. These
documents will contain important information about the offer that should be
read carefully before any decision is made with respect to the offer. These
materials will be made available to the shareholders of the Company at no
expense to them. Investors and security holders will be able to obtain the
documents (when available) free of charge at the SEC’s web site, www.sec.gov,
after they have been filed. Any materials filed with the SEC may also be
obtained without charge at the Company's website, www.fwc.com.
This announcement is for informational purposes only and does not constitute
or form part of an offer to sell or the solicitation of an offer to buy or
subscribe to any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction. This announcement is not an offer of securities for sale into
the United States. No offering of securities shall be made in the United
States except pursuant to registration under the US Securities Act of 1933, or
an exemption therefrom.
Participants in the Solicitation
If an offer is made by AMEC, and the offer also involves a solicitation of a
proxy, the Company, AMEC and their respective directors and executive officers
and other members of management and employees may be deemed to be participants
in any such solicitation of proxies in respect of any such proposed offer.
Information about the Company's directors and executive officers is available
in its Form 10-K for the year ended December 31, 2012, dated March 1, 2013.
The Company understands that it is AMEC's intention that information about
AMEC's directors and executive officers will be made available in the
registration statement on Form F-4 if and when any such registration statement
is filed. Other information regarding the participants in the proxy
solicitations and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the relevant materials to
be filed with the SEC regarding the transaction, if an offer is made by AMEC,
when they become available. If an offer is made by AMEC, investors should read
the all materials filed with the SEC carefully when they become available
before making any voting or investment decisions. You may obtain free copies
of these documents using the sources indicated above.
Contact:
Media
Foster Wheeler
Patti Landsperger, 908-713-2944
patti_landsperger@fwc.com
or
Investor Relations
Scott Lamb, 908-730-4155
scott_lamb@fwc.com
or
Other Inquiries
908-730-4000
fw@fwc.com